To save confusion there are three generations involved in this the grandmother (Jonna) the daughter (Malane) and the

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Customer: To save confusion there are three generations involved in this the grandmother (Jonna) the daughter (Malane) and the grandchild (Angela).
So there is a discretionary trust with two settlors the grandmother (Jonna) and grandchild(Angela) the beneficiaries of the trust are unborn children of the grandchild settler (and there is a likely hood here will never be any children )..
The trust was set up to buy a house for the grandmother to provide a safe secure future for the grandmother.
Both settlors put in $50,000 with the grandmother gifting $26,000 odd to the trust.
The grandmother now has dementia and is in a home and no longer needs the use of the house.
The trustees were the grandmother and granddaughter. As the grandmother has diminished capacity a new independent trustee has been appointed.
The property has increased by $120,000 in value.
The grandmothers daughter (Malane) is the sole beneficiary of the grandmothers will.
It has been suggested by the Lawyer appointed for Jonna and the lawyer representing Jonna that the trust be wound up. The granddaughter is adamant she doesn’t want this to happen.
Angela has been appointed temporary property manger.
The family court has instructed her to explore this option with the newly appointed trustee who is a Judge to explore winding the trust up.
I have three questions.
1. If the grandmother dies does the daughter (Malene) inherit the remainder of the trust money that hasn’t been gifted? In as much as the trust owes the settlors money.
2. If the grandmother dies and there are no living beneficiaries of the trust and the grandmother was a discretionary beneficiary does the trust have to pay out her interest in the trust to her estate?
3. If yes to the above question would that include the increased value of the house and or half or all of the gifted money?
4. If the grandmother dies does the beneficiary of her will inherit her discretion beneficiary status with the trust.To save confusion there are three generations involved in this the grandmother (Jonna) the daughter (Malane) and the grandchild (Angela).
So there is a discretionary trust with two settlors the grandmother (Jonna) and grandchild(Angela) the beneficiaries of the trust are unborn children of the grandchild settler (and there is a likely hood here will never be any children )..
The trust was set up to buy a house for the grandmother to provide a safe secure future for the grandmother.
Both settlors put in $50,000 with the grandmother gifting $26,000 odd to the trust.
The grandmother now has dementia and is in a home and no longer needs the use of the house.
The trustees were the grandmother and granddaughter. As the grandmother has diminished capacity a new independent trustee has been appointed.
The property has increased by $120,000 in value.
The grandmothers daughter (Malane) is the sole beneficiary of the grandmothers will.
It has been suggested by the Lawyer appointed for Jonna and the lawyer representing Jonna that the trust be wound up. The granddaughter is adamant she doesn’t want this to happen.
Angela has been appointed temporary property manger.
The family court has instructed her to explore this option with the newly appointed trustee who is a Judge to explore winding the trust up.
I have three questions.
1. If the grandmother dies does the daughter (Malene) inherit the remainder of the trust money that hasn’t been gifted? In as much as the trust owes the settlors money.
2. If the grandmother dies and there are no living beneficiaries of the trust and the grandmother was a discretionary beneficiary does the trust have to pay out her interest in the trust to her estate?
3. If yes to the above question would that include the increased value of the house and or half or all of the gifted money?
4. If the grandmother dies does the beneficiary of her will inherit her discretion beneficiary status with the trust.To save confusion there are three generations involved in this the grandmother (Jonna) the
JA: Since estate law varies from place to place, can you tell me what state this is in?
Customer: Its new zealand
JA: What documents or supporting evidence do you have?
Customer: I dont need any this is supposed to me chatting to a new zealand lawyer online
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: no
Answered by Chris The Lawyer in 22 mins 7 months ago
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Chris The Lawyer, Expert

Hi My name is ***** ***** I am a New Zealand lawyer based in Wellington with more than 42 years of experience. I am here to help with your questions.
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Chris The Lawyer, Expert

If your grandmother dies, then what is in the trust is no longer part of her estate. The assets of the trust pass in terms of the trust and not under her will. If she still has assets they will pass according to her will, which I assume is to her daughter.

If she is a discretionary beneficiary then she does not get any interest in the trust as there would need to have been a decision by the trustees before her death, vesting a share. Unless that was done she does not share in the trust and so her estate does not either. The trust property will therefore pass according to what the trustees say in exercising their discretion.

Customer
ok thanks so the granddaughter and the grandmother are the two original settlors and discretionary beneficiaries
Customer
the granddaughter is a trustee and has appointed another trustee as the grandmother no longer has capacity. The granddaughters children (she has none) are the beneficiaries of the trust is that not conflict of interest because if the grandmother dies that makes her the only discretionary beneficiary left which means she can have all the grandmothers input into the trust to herself
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Chris The Lawyer, Expert

The key issue is the purpose of the trust and application of the purpose to exercise of the discretionary powers
Customer
The purpose of the trust as stated in the trust docs when it was set up was to provide an affordable, secure tenancy for the grandmother. She no longer has capacity and as she is a in a home with dementia no longer needs the house to live in. The lawyer for the daughter suggested to the granddaughter in writing to wind the trust up and pay out the grandmother as did the lawyer for the grandmother appointed by the court. The granddaughter has appointed another trustee a North Island Judge. The granddaughter has been appointed interim Property Manager and told by the family court Judge to explore with the new trustee about winding up the trust. The grand daughter is an accountant and appears very reluctant to sell the property and or pay the grandmother out
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Chris The Lawyer, Expert

It may be necessary to apply to the High Court for directions in this case or use the alternative dispute procedures like mediation 

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Chris The Lawyer, Expert

I hope this helps

Customer
thanks
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